It is impossible to foresee what might ultimately happen with Brexit, the developments over that past few weeks have been unprecedented. Business owners can only continue with their contingency planning to try and ensure their commercial interests are as protected as possible, without these preparations becoming all-consuming and a waste of time.
Clearly, many business owners are just waiting to see what happens. Who can blame them? According to British Chambers of Commerce research, over a fifth of British companies have not conducted a Brexit risk assessment. This article highlights one action every business with EU trading interests needs to be taking as a minimum, in case of a no-deal Brexit occurring, and that is to get an EORI number.
Why is an EORI number important for Brexit planning?
EORI (Economic Operator Registration and Identification) numbers should be a key part of the Brexit business planning toolkit for any business that trades with EU countries. HMRC has already been issuing them to many businesses as a precaution, and this is ongoing. If you receive one and are unsure why, it is because HMRC believes you may need it and is undertaking an auto enrolment process.
The EORI number is essential for importing or exporting goods. Whilst the UK is in the EU, it’s not essential to have, but as soon as the country leaves, all movements of goods to and from the EU will be treated as imports or exports.
If you trade with businesses based in other EU countries, we recommend the following:
- Check if you have an EORI number already or are due to be getting one; and
- If you don’t have one or are due to be getting one, apply for it immediately.
Six Brexit pre-planning tips for trading businesses
- Get an EORI number to continue trading with EU companies. Without this, goods may be rejected at customs borders and your customs entry may be declined by HMRC.
- Establish set procedures for moving goods into and out of the EU post Brexit, check whether there are special procedures required for controlled goods.
- Apply for the Transitional Simplified Procedure (TSP), this will simplify the movement of goods and also minimise the cashflow implications of any duties that are payable.
- Duties on certain goods have been suspended, but some imports and exports are excluded. Check what will impact your business and if you are obliged to pay a duty ensure you have the funds available.
- Review your supply chain to establish whether there are any VAT or duty implications after Brexit, as this could result in double payment of a customs duty.
- Check whether you need to set up an overseas VAT registration.
If you would like to discuss your VAT compliance or any other aspect of business planning with us, please contact partners@rjp.co.uk